How to judge Medicare plans

Retired teacher Pat Kersbergen, 74, of Upland has Medicare and buys a separate drug plan to help cover the cost of her prescription medications. (Irfan Khan / Los Angeles Times)

While much of the nation is preoccupied with Obamacare and picking new health insurance at work, older Americans have deadlines of their own coming up — involving Medicare.

We're just a few days away from the two-month period when the nation's 54 million Medicare beneficiaries have a chance to change their Medicare Advantage and prescription drug plans.

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Every year, seniors should review their options and compare plans even if they're happy with their current coverage. Experts want people to avoid being surprised after it's too late to change. The deadline is Dec. 7.

The process of shopping can be daunting, and many seniors simply don't heed the advice.

"It's the same advice we give every year, but it's hard to get people off the dime," says Ross Blair, senior vice president of eHealthMedicare.com, which provides tools and information on Medicare insurance issues.

Yet Blair says millions of people will see the cost of their current plans increase next year, even if just a little. "That can add up when you're on a fixed income," he says.

Retired teacher Pat Kersbergen, 74, of Upland got a jump start on her shopping. She has Medicare and buys a separate drug plan to help cover the cost of her prescription medications.

She says she didn't bother comparing plans during last year's election period, which left her without any coverage for one of her medications. This year, she won't make the same mistake.

"I'm going to find out the best drug plan for me," she says.

But figuring out which plan that is can be more complicated than it sounds, Kersbergen says.

"I can save approximately $20 per month on the premium with one of the plans that does include all my necessary drugs. But I'll need to work with quantity limits or spend $20 more for a different plan, have all my drugs on the formulary, but then would have to change pharmacies," she says.

Medicare Advantage plans. Nearly 16 million people — or about 30% of the Medicare population — are enrolled in Medicare Advantage plans. These cover hospitalization, outpatient care and, often, prescription-drug coverage under one plan.

According to the Centers for Medicare and Medicaid Services, the average premium for Medicare Advantage plans will increase less than $3 next year, to $33.90 per month. Residents of Los Angeles County will see average costs of just $13.74 per month. The vast majority of enrollees will face little or no premium increase for next year.

But out-of-pocket costs, such as deductibles and co-pays, are expected to rise. Looking beyond the monthly premium will be important for shoppers wanting to save money.

In some cases, insurers are consolidating the number of plans they offer. This year nationwide, "2 million people are affected by plan terminations, and about 380,000 will actually have to change carriers because the insurer is no longer offering anything in their service area," Blair says.

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Pay attention to networks, experts stress. Medicare Advantage plans are also reducing the size of their provider networks — in some cases quite dramatically.

If your physician will no longer be participating in your current plan, your insurer is required to send you notice of that fact and help you find another doctor in the network.

Ronald Bolding, CEO of Pomona-based Inter Valley Health Plan, a nonprofit Medicare Advantage plan, says people need to be alert. Look at available doctors, hospitals and pharmacies. "It should be clearly evident in the directories, but admittedly it may take a little work to figure it out," he says.

Nationwide, the average monthly premium in 2015 will be about $31, the federal government estimates. In California the figures vary, but the average is $58.91.

Although the number of these plans has dropped for 2015, there will still be 1,000 available nationwide. In Los Angeles County, Medicare participants will have 31 plans from which to choose for 2015, down from 34 this year.

As with Medicare Advantage plans, insurers are shifting more costs onto beneficiaries in the form of higher out-of-pocket costs, such as deductibles, co-pays and co-insurance, so you need to look beyond premiums.

Experts urge consumers to be alert for possible changes since last year's Medicare Advantage and prescription plans.

They say it's critical to make sure the medications you take are on a plan's list of covered drugs. And watch out for restrictions, such as the need to fill prescriptions at in-network pharmacies, get prior authorizations or try generic drugs before a brand name will be covered.

Also, many plans have "preferred" status pharmacies, whose costs can be lower than other in-network pharmacies, says Elaine Wong Eakin, executive director of the Medicare advocacy organization California Health Advocates. In fact, 70% of Medicare drug plans had preferred pharmacy networks this year, and the expectation is there will be more in 2015.

Also, pay attention to the ratings. To help consumers determine the value of both Medicare Advantage and prescription drug plans, Medicare created a quality rating system. A plan can receive one to five stars, with five being the best, based on the agency's assessment of medical services and customer satisfaction.

"We encourage consumers to look for high-performance plans, and these are plans with more stars," Wong Eakin says.

Consider passing on any with less than 3.5 stars, experts say.

Based on her own comparison of drug plans, Kersbergen, the retired teacher from Upland, also cautions shoppers to pay close attention to the details.

"The less expensive plan had higher drug co-payments than the more expensive one. So an individual taking several medications could conceivably have higher out-of-pocket expenses per month with the less expensive premium plan."